CHINA Law and Practice Contributed by: Qian Xiaoqiang, Yang Yikai and Chu Linxian, Haiwen & Partners
(a) 1–10% of its sales amount in the previous year; (b) up to CNY5 million in the absence of sales amount in the previous year; (c) up to CNY3 million if the monopoly agree - ment concluded has not yet been imple - mented; or (d) up to CNY1 million if the legal representa - tive, principals and directly accountable person of the undertaking are personally accountable for concluding the cartel infringement (such personal liability was introduced by the 2022 amendment); this provision also applies to an undertaking that organises or provides substantial assistance to other undertakings in the reaching of cartel agreements. When an undertaking hinders the Competition Authorities’ investigation by refusing to provide information, giving false information, hiding, destroying, or transferring evidence, or other - wise obstructing the process, under Article 62 of the AML, the Competition Authorities can: • order the undertaking to correct its behaviour; and • impose a fine of: (a) up to 1% of its sales amount in the previ - ous year; (b) up to CNY5 million in the absence of sales amount in the previous year or if the sales amount is difficult to calculate; or (c) up to CNY500,000 in the case of an indi - vidual. The 2022 amendment to the AML (the “2022 Amendment” ) also introduces aggravating fac - tors in the calculation of the fine, permitting an increase in the base fine amount by two to five times if “the circumstances are particularly seri-
ous, the impact is especially severe or the con- sequences are especially serious” . Civil liabilities If an undertaking violates the AML and causes any loss to others, Article 60 of the AML stipu - lates that it shall assume corresponding civil liability. This includes liabilities arising from civil public interest litigation initiated by the People’s Procuratorate, as well as those arising from pri - Before 2022, the AML did not impose crimi - nal liability. However, the 2022 Amendment enhanced the liability framework. Under Article 67, if an undertaking’s violation is grave enough to constitute a criminal offence, it will incur cor - responding criminal liability. Such liabilities are pertinent only to violations outlined in the Crimi - nal Law and its amendments, with the People’s Procuratorate having exclusive authority to initi - ate criminal prosecutions. Under the PRC’s cur - rent criminal legislation (for the purposes of this article, the “PRC” refers to the mainland of the People’s Republic of China, excluding the Hong Kong Special Administrative Region, the Macao Special Administrative Region and the Taiwan Region of the People’s Republic of China), only two types of cartel-related conduct are subject to criminal liability per Articles 223 and 277 of the Criminal Law: bid rigging and egregious obstruc - tion of enforcement. Both violations could result in fines and/or imprisonment of up to three years, with penalties initially suggested by the People’s Procuratorate and ultimately determined at the discretion of the People’s Court. vate legal actions. Criminal liabilities The 2022 Amendment leaves the door open for criminalising other cartel-related misconduct. Further clarification or specific provisions are expected in the future.
36
CHAMBERS.COM
Powered by FlippingBook